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15 Feb, 2008 14:59

Gazprom eyes foreign assets

Gazprom made third quarter profits of $US 4.8 billion for 2007 – that’s down 6% on last year, but above forecasts. The firm blamed the falling profits on lower fuel prices in Europe. The third quarter is normally the weakest for the gas monopol

Those profits, however, came on the back of rising revenues of $US 20.2 billion dollars, which are just a little above forecasts.

Over recent years, the company's capitalization has increased twenty fold to reach $US 350 billions. Such rapid growth and the resulting financial strength translates into great potential stability.

Putin speaks

As Russia's largest energy company Gazprom is rarely far from the news, but the week has seen it thrust into the spotlight once again.

After threatening Ukraine with a turn down of the taps Tuesday saw agreement reached on payment of an outstanding debt, with Gazprom and its Ukrainian counterpart agreeing to set up new trading intermediaries in future, which should resolve supply issues.

The heart of that issue was referred to once again in President Putins question and answer session on Thursday.

“We are two different states, we want to sell gas at market prices. We are gradually introducing market based prices, even domestically. Yes, gas will always be cheaper in Russia – minus export duties, transit costs, but the principle will remain the same both for us and for out international partners. And I was very pleased that Ukraine understands it,” Putin said.

Foreign assets eyed

But the handling of the matter added to nervousness about Gazproms as a gas supplier for Europe, despite its never having failed to deliver on a contract. With Gapzrom looking to establish a greater downstream presence in Europe in exchange for access to upstream in Russia, the President noted that one came with the other, and that Europe and Gapzrom need each other.

Market analysts agree, that security of supplies not just profits, are the main motive for Gazprom to look for assets abroad. Those assets will ensure Europe’s energy security as well the security of Gazprom.